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Ulta Beauty (Nasdaq: ULTA) | Company Profile, History, Competitors

 

Ulta Beauty (NASDAQ: ULTA) operates a chain of beauty stores in the United States. As of 2017, ULTA operates 1,047 stores in 48 states. It was founded in 1990 and headquartered in Bolingbrook, IL.

ULTA was founded in 1990 by Richard George, the former president of Osco Drug. ULTA offers a convenient one-stop location for customers to shop for their beauty needs, for both mass and premium products and services.

Store Concept

The average ULTA store location is 10,000 square feet, which includes 950 square feet dedicated to the full service salon.

ULTA's store product offering is based on its strong relationship with its vendors. ULTA has a proven track record of partnering with new and underveloped brands. ULTA also has dedicated store space of 360 square feet ("boutiques") each for main vendors (Lancome, Clinique, bareMinerals), with plans to expand to additional brands.

ULTA's store service offering is built around three pillars:
  • The Salon: ULTA dedicates 950 square feet of store space for a hair salon. It typically has eight chairs and ten or more stylists.
  • The Benefit Brow Bar: ULTA dedicates 225 square feet of store space for eyebrows.
  • The Dermalogica Skin Bars: ULTA dedicates 260 square feet of store space for skin services. It is staffed by a licensed skin therapist.

Ultamate Rewards

ULTA's loyalty member program has grown to 28 million members at end of 2017. Loyal member sales represent more than 90% of annual total sales. 

ULTA has an effective CRM platform enabling targeted marketing communications to their customer's unique beauty needs.

Suppliers & Distribution

ULTA depends on a limited number of vendors, with the top 10 vendors accounting for 50% of ULTA's sales.

The company operates five distribution centers in the United States. Inventory from suppliers is shipped to the distribution centers. The distribution centers delivers the products to the stores through last mile carriers.

History

The company was founded in 1990 by Richard George, the former President of Osco Drugstores. In the first year of opereations, the company opened five stores around the Chicago area.

In 1996, Mr. George left the company and Terry Hanson took over as CEO. In 1997, ULTA launched its customer loyalty program.

In 2002, ULTA had over 100 stores. In 2007, ULTA began rolling out its Clinique boutiques within its stores. In 2017, the company also went public.

In 2008, the company rolled out the Benefit Brow boutiques in its stores.

In 2010, ULTA launched Ultamate Rewards, a point-based rewards program.

In 2011, the company rolled out Lancome boutiques within its stores.

In 2012, ULTA had over 500 locations.

In 2017, ULTA began to carry MAC Cosmetics on its website and within its stores.

Competition

Beauty industry is highly competitive and ULTA competes against traditional department stores, specialty stores and online retailers. 

Management

Mary Dillon (CEO): Mary Dillon serves as CEO since 2013. Prior, she was CEO of US Cellular, a wireless telecommunications company. She has also served as Chief Marketing Officer of McDonalds and President of Quaker Foods at PepsiCo.

Scott Settersten (CFO): Scott Settersten serves as CFO since 2013. Prior, he served in various roles at ULTA, including VP Accounting and Director of Financial Reporting.

Financials

 $ USD in millions     2013     2014  2015  2016  2017
 Revenues  $2,671  $3,241  $3,924  $4,855  $5,885 
 Gross Profit  $941  $1,137   $1,384   $1,747   $2,097 
 Operating Profit   $328  $410   $506   $655   $785 
 Net Income  $203  $257  $320   $410   $555 
 EPS  $3.17  $4.00  $5.00  $6.55  $9.02 
Ulta Beauty, Inc.
 
  Ticker     NASDAQ: ULTA
  Industry Retail
  Founded 1990
  Headquarters Bolingkbrook, IL
  Locations 1,047 (2017)
  Revenues
$5.9bn (2017)
  Employees 34,700 (2017)
  Website ulta.com